The New York State Court of Appeals recently decided a question involving coverage under an uninsured motorist endorsement where another motorist intentionally drove his vehicle onto the sidewalk injuring numerous individuals. State Farm Mutual Automobile Insurance Company v. John Robert Langan, New York State Court of Appeals, March 29, 2011.
Neil Spicehandler was struck by a vehicle in Manhattan, and ultimately died from complications arising from the accident. He was one of many who were injured when the driver, Ronald Popadich, intentionally drove his vehicle onto the sidewalk and into pedestrians. Popadich later plead guilty to second degree murder, admitting that he intended to cause Spicehandler's death.
Spicehandler was an insured under an automobile liability policy issued by State Farm to John Langan. As administrator of Spicehandler's estate, Langan made a claim to recover benefits under the policy's uninsured/underinsured motorist endorsement (UM), mandatory personal injury protection endorsement (PIP), as well as the death, dismemberment and loss of sight endorsement (Coverage S).
The UM endorsement provided that State Farm "will pay all sums that the insured or the insured's legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle because of bodily injury sustained by the insured, caused by an accident arising out of such uninsured motor vehicle's ownership, maintenance or use." The PIP and Coverage S endorsements also covered damages arising from "an accident."
State Farm disclaimed coverage under all of the endorsements on the grounds that decedent's death was caused by intentional conduct of the operator of the vehicle, and not by "an accident."
Following Popadich's conviction, State Farm renewed a motion for summary judgment in its declaratory judgment action. Langan cross-moved for a declaration of coverage. Supreme Court ultimately granted State Farm's motion, and denied Langan's cross-motion.
On appeal, the Appellate Division modified to declare that State Farm was required to provide benefits under the PIP and S endorsements, but that State Farm was not required to provide UM benefits.
The Appellate Division held that a standard liability policy would not have covered Popadich for his intentional criminal conduct, and, therefore, Langan's UM coverage was not applicable. Two justices dissented, and, ultimately, both parties appealed to the Court of Appeals based on leave granted by the Appellate Division.
On appeal, the Court of Appeals noted that the term "accident" is not given a narrow, technical definition, but is interpreted according to how it would be understood by the average person, and involves looking at the matter from "the point of view of the insured, to see whether or not"¦it was unexpected, unusual and unforeseen." The Court held that, from the perspective of the insured (Spicehandler), this occurrence was unexpected and was an accident, even though Popadich admittedly intended to strike decedent with his vehicle.
State Farm argued that the purpose of mandatory uninsured motorist benefits is to provide coverage coextensive with that afforded by a standard liability policy. The Court rejected that argument, distinguishing cases relied upon by State Farm. The Court of Appeals pointed out that underinsured motorist benefits are purchased under the insured's own policy, and the insured is the victim and not the tortfeasor. Thus, the public policy against providing coverage for an insured's criminal acts is not implicated. The Court further noted:
"This result is also in keeping with the national trend toward allowing innocent insureds to recover uninsured motorist benefits under their own policies when they have been injured through the intentional conduct of another***."
This decision is a further example of a liberal policy interpretation in favor of an insured.
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